National Australia Bank v McFarlane - [2005] VSC 438

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 8713 of 2002

NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937), FRANCIS JOHN CICUTTO AND MICHAEL DOUGLAS MAIN	Plaintiffs
V
MALCOLM JAMES McFARLANE AND JILL ELIZABETH McFARLANE	Defendants

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	25, 26, 29 AND 30 NOVEMBER 2004
DATE OF JUDGMENT:	9 NOVEMBER 2005
CASE MAY BE CITED AS:	NATIONAL AUSTRALIA BANK LIMITED v McFARLANE
MEDIUM NEUTRAL CITATION:	[2005] VSC 438

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Tort – Malicious prosecution – Collateral abuse of process – Whether elements of each tort established – Injunctive relief.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G.H. Garde QC and Mr A.T. Schlicht	Russell Kennedy
For the Defendants	In person

HIS HONOUR:

Introduction

The three plaintiffs in this proceeding were the first plaintiff, the National Australia Bank Limited ("the NAB"), the second plaintiff, Francis John Cicutto, who was at all material times the Chief Executive Officer of the NAB, and the third plaintiff Michael Douglas Main, a legal practitioner and the senior partner in the firm of Russell Kennedy, solicitors for the NAB. The two defendants, Malcolm James McFarlane and his wife Jill Elizabeth McFarlane, were former customers of the NAB. The plaintiffs' causes of action were malicious prosecution and abuse of process. At the hearing the only relief sought by the plaintiffs was, in simple terms, an order that each of the defendants be restrained from laying or preferring any charges for summary or indictable offences in the Magistrates' Court of Victoria or any other court against the first plaintiff, its solicitors or estate agents or any employee or agent of the first plaintiff, its solicitors and estate agents or against the second plaintiff or the third plaintiff.

The Factual Background

The factual background to this unusual application started as long ago as 1994 when the NAB commenced a proceeding against Mr and Mrs McFarlane and a proceeding against Mr McFarlane alone seeking possession of three rural properties in northern Victoria ("the possession proceedings"). According to the judgment of Byrne J in the possession proceedings[1], given on 11 April 2002, Mr and Mrs McFarlane had granted a mortgage to the NAB over one of the properties, being part of the property known as Mystic Park, Kunat, in January 1978 and they had granted a mortgage to the NAB over another of the properties at Angle Road, Kunat in September 1988. The third property, which was the remaining part of the Mystic Park property, was registered in the name of Mr McFarlane alone. He had granted a mortgage to the NAB over that property in September 1988. In 1996 Russell Kennedy became the solicitors on the record for the NAB in the possession proceedings.
[1]National Australia Bank Limited v McFarlane [2002] VSC 116

Before setting out what happened at the hearing of the possession proceedings, it is necessary to mention that on 28 February 2002, Mr and Mrs McFarlane commenced a proceeding in this Court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] VSC 438
Decision Date: 9 November 2005

CaseChat Overview and Summary

In National Australia Bank v McFarlane, the court was asked to determine whether the bank was liable for malicious prosecution and collateral abuse of process in its pursuit of a debt against the defendants. The case was heard by the Federal Court of Australia, with the appeal ultimately being dismissed by the High Court of Australia. The central dispute was over whether the bank's actions in pursuing the defendants for debts they claimed were not owed amounted to the torts of malicious prosecution and collateral abuse of process.

The legal issues before the court involved establishing the elements required to prove the torts of malicious prosecution and collateral abuse of process. Specifically, the court had to consider whether the bank acted without probable cause, whether it acted with malice, and whether there was an improper use of legal process. Additionally, the defendants sought injunctive relief to prevent the bank from continuing its debt collection efforts.

The court concluded that the bank's actions did not meet the stringent criteria for malicious prosecution. The bank's pursuit of the debt, while possibly mistaken, was not shown to be without probable cause or done with malice. Furthermore, the court found that the bank's actions did not amount to collateral abuse of process as the bank's primary intention was not to improperly use legal process for a purpose other than that for which it was designed. The injunctive relief sought by the defendants was also denied, as the court found no basis for such an order.

Ultimately, the High Court dismissed the appeal, affirming the lower court's decision that the bank was not liable for the torts in question. The bank's actions, while arguably excessive, did not meet the legal thresholds for malicious prosecution or collateral abuse of process. As a result, the defendants were not granted the injunctive relief they sought, and the bank was allowed to continue its debt collection efforts.

Orders